We didn't expect this at all, so everyone is confused. For now, even when we get calls, we're checking the details through a tax accountant and giving answers. (Staff member at A Real Estate Agency in Sam-dong, Uiwang, Gyeonggi)
As all of Seoul and 12 areas in Gyeonggi Province were designated as land transaction permit zones, areas subject to adjustment, and speculative overheating districts, attention is focused on reactions in nearby regions to Seoul where apartment prices have surged recently, such as Gwacheon, Seongnam, and Yongin. In contrast, areas that did not expect regulation say they are confused.
The government on Oct. 15 announced the Housing Market Stabilization Measures (the Oct. 15 measures). The plan included designating all of Seoul and 12 areas in the province—Gwacheon; Gwangmyeong; Seongnam's Bundang, Sujeong, and Jungwon districts; Suwon's Yeongtong, Jangan, and Paldal districts; Anyang's Dongan District; Yongin's Suji District; Uiwang; and Hanam—as areas subject to adjustment and speculative overheating districts. In January 2023, four areas including Gwacheon and Seongnam's Bundang and Sujeong were lifted from regulation, making the entire province a non-regulated area; it has been 2 years and 9 months since then.
On the afternoon of the 16th, the day after the government announced the regulations, real estate agencies in Anyang and Suwon were all busy as inquiry calls kept coming in. Both buyers and sellers had not anticipated the regulations, causing confusion and a flood of related inquiries.
A staff member at B Real Estate Agency in Dongan District, Anyang, said, "Not only end users who were considering a purchase but also multiple-home owners who were planning additional purchases because the area wasn't subject to adjustment are all in confusion," adding, "There were many calls yesterday saying they would settle the balance, and inquiry calls are continuing even today."
Gwacheon and Seongnam's Bundang District, among others, said they had anticipated regulation. A staff member at B Real Estate Agency in Byeoryang-dong, Gwacheon, said, "Many people expected some level of regulation and carried out transactions in advance," adding, "As transactions were done ahead of time, it has been relatively quiet recently, and even after the announcement there hasn't been a big reaction."
According to the Korea Real Estate Board (REB), as of Sept. 22 this year, the cumulative rise in apartment prices in Gwacheon was 12.19%. It was the second highest nationwide after Songpa District in Seoul (13.43%). Seongnam's Bundang District followed with a cumulative rise of 8.83%.
In contrast, Hanam (2.85%), Seongnam's Jungwon District (0.86%), Uiwang (0.67%), Suwon (0.12%), and Gwangmyeong (0.06%) recorded gains that were lower than or similar to last year.
In Anyang, Uiwang, Suwon, and other places, alongside the confusion, there are complaints that the designation came too early. A staff member at D Real Estate Agency in Gocheon-dong, Uiwang, said, "There are many redevelopment zones, but with temporary regulations suddenly imposed, everyone is at a loss," adding, "If there had been advance notice, we would have disposed of properties ahead of time, but with no grace period, we're suddenly blocked by regulations and in a difficult situation."
Suwon pushed back because not only Yeongtong District, which includes Gwanggyo New Town, but also relatively less popular districts such as Jangan and Paldal were included as regulation targets. A staff member at a real estate agency inside an apartment complex in Paldal District, Suwon, said, "It seems they grouped everything at once to prevent a spillover effect into Suwon if they regulated Gwacheon and Bundang, but I think it's excessive," adding, "Apartment complexes near Gwanggyo or Hwaseo Station have shown an upward trend, so that's somewhat understandable, but our complex recently had no transactions and prices were flat, yet we were hit just the same."
Some say a spillover effect is expected in places such as Gwonseon District in Suwon, the only part of the city not designated for regulation, and Hwaseong's Dongtan New Town, which had recently been rising but was not designated. The Land Ministry said on the day of the policy announcement that if a spillover effect appears, it will continue to review adding more regulated areas.
Experts predicted that as buyers turn to a wait-and-see stance, areas that did not anticipate regulation will show a downward trend. Kim Hyo-seon, senior real estate fellow at NH Nonghyup Bank, said, "Because areas where a spillover effect could occur were designated all at once, transaction volume is expected to drop sharply," adding, "Some transactions may occur on expectations that prime locations will continue to rise, but areas such as Uiwang and Anyang, which did not expect regulation, were not seeing strong gains even before the announcement, so this measure will further cool the market."
Kim Eun-seon, head of the Data Lab at Zigbang, said, "Not only areas that surged sharply but also areas that showed slight increases due to a spillover effect were preemptively covered," adding, "With tighter regulations, more would-be buyers in regulated areas are likely to switch regions or turn to the rental market."